Aker Solutions said Friday that it will cut as many as 900 jobs in Norway and shut down some operations in response to shrinking work loads.
The company notified employees in its maintenance, modifications and operations (MMO) unit across Norway about the cuts on Friday.
Norway-based Aker said it will streamline its Norwegian MMO business down to one regional unit from its previous level of four, a move that will affect management and staff from Tromsø to Stavanger.
Depending on future work levels, as many as 900 permanent positions may be impacted at facilities in Stavanger, Bergen, Kristiansund, Trondheim, Tromsø and Sandnessjøen as well as offshore positions.
The workforce reductions will be made through a mix of regular employee turnover, reassignments to other parts of the company and redundancies.
“A process to implement about half of the reductions will start immediately,” Aker Solutions said.
The company added that remaining adjustments will depend on work levels throughout the year.
A market slowdown has forced Aker to cut about 1,300 permanent and temporary positions in its Norwegian MMO business since July 2014.
“These measures are painful but necessary to strengthen the competitiveness and longer term potential of our Norwegian MMO business, which has suffered from a sharp drop in activity in Norway’s offshore services market,” Aker Solutions CEO Luis Araujo said.
There has been a substantial downturn in investments in the Norwegian oil and gas market since oil prices began falling in 2014.
A report published earlier this week by the Norwegian Petroleum Directorate found that investment in the Norwegian Continental Shelf dropped by 16 percent in 2015.
The agency expects investment in the area to continue falling over the next two years, with a “moderate increase” expected in 2019.
Aker Solutions expects the MMO market in Norway to continue to be “challenging” in 2016.
Work volumes are also expected to take a hit as the company’s long-term maintenance and modifications framework agreement with Statoil expires in the first half of 2016.
Aker said it will temporarily shut down its prefabrication workshop in Sandnessjøen for about three years due to falling work volumes.
MMO operations in Tromsø will also be terminated, though some employees will likely be kept on as part of the company’s Arctic Hub.
These employees will join Aker Solutions’ Engineering and Front End Spectrum teams.
“Market conditions are challenging, but I am confident that the steps we are taking now to streamline operations, reduce costs and focus on our key strengths will enhance our position in MMO, also internationally, where we have been winning business and expanding in countries including Canada, the UK and Brunei,” Araujo said.
Aker Solutions has about 16,000 permanent employees in about 20 countries.
About 5,000 of Aker’s employees are in the MMO area, with about 3,600 in Norway.